The premise of a two-tier Internet based on data usage stems from the proliferation of data caps among many providers, particularly for fast-growing wireless Internet services. The days of "unlimited Internet" are over at many providers, replaced by packages that include a fixed amount of data usage each month with expensive overage charges for those that exceed their monthly allocation.

Sensing consumer frustration with data caps, network providers have begun to offer access to some services or content that does not count against the monthly cap. The result is a new two-tier Internet: one Internet that counts against the monthly data cap and another that does not.

Rather than raise caps, lower prices on restrictive caps or eliminate them altogether, the ISPs are instead pushing for something not unlike AT&T's recently announced "sponsored data" plans. This would allow Canadian ISPs to either collect from internet services by having them pay "freight" on data or, failing that, push their own preferred platforms and services by having these not impact customers' data usage.

As usual, it's being presented as a "win" for customers. ISPs will "assist" frustrated users in staying under their data caps by either funneling them through ISP portals (and using these to push other preferred services) or by making a bit more money selling data usage to interested companies.

Canadian providers have also begun to examine how data caps can be used to differentiate between content. For example, Bell offers a $5 per month mobile TV service that allows users to watch dozens of Bell-owned or licensed television channels for ten hours without affecting their data cap. By comparison, users accessing the same online video through a third-party service such as Netflix would be on the hook for a far more expensive data plan since all of the data usage would count against their monthly cap.

All of this goes to prove that ISPs/wireless providers don't really care how much data their customers use. They only care how much money they can make from the data flow. This will encourage users to return to the good old days of buffet-style internet usage… provided, of course, that they use the ISPs preferred platforms and services. The message is clear: use all the bandwidth you want, just as soon as we've dipped our wicks into the revenue stream. As for the net neutrality concerns, the ISPs will likely address those the same way AT&T did. Everything's arriving at the same speed, sponsored or not, so what's the big deal?

The end result will be even less competition and users will be put in the position of using incumbent services (or inferior services) in order to avoid cap overages. Once these two-tier plans become the norm, the instinctual reaction from ISPs will be to further lower data caps. After all, users are getting so much data for "free," they're barely racking up overage charges. That's an unacceptable outcome, and very shortly, what's being pitched as a boon for frustrated customers will turn into a downward spiral of cap constraints and the elimination of competitive pressure.

Reader Comments

content providers / ISPs

The real issue of Canada isn't net neutrality per se, rather it's that the major ISPs (Rogers, Bell, Telus, Cogeco, etc) are all also owners of content services. Rogers and Bell are two of the biggest, Bell owns the largest broadcast network, as an example - and both own many of the movie and cable channels either directly or through captive holding companies.

Bell, Rogers, Cogeco and Telus are pretty much the entire wireless market as well.

The problem is that they grant themselves access that they do not give to others. If they were only ISPs, they may offer the same "preferred" status to anyone who would pay, which could be considered acceptable.

You have to remember that many companies (such as Google/ Youtube, Netflix and others) are also engaged in deals with major ISPs to get better peering to their customers. Some may even have their network equipment directly in the ISP's central office, meaning less jumps and better delivery. It's not a new idea.

Mr Geist is waving his arms at the wrong problem, it's not net neutrality that is a problem here, rather it's media ownership concentration in the Canadian marketplace. With the last miles (even wireless) owned by all of the same players, there is no chance of competition.

fortunately our republican (i mean conservative) prime minster will overrule any hard caps as he has in the past to get re-elected (abandoning ones ideology to stay in power is apparently passe, all the real exploitation of the public is done away from the public eye)

While I'd like to pay nothing to use a service I wouldn't support it. It's just far too unfair to the little guys who already have enough issues as it is trying to compete with billion dollar companies.

"Free" services

Last year, my carrier (here in Brazil) implemented "free" facebook and twitter (they do not count against your data caps).

I don't know about the "free" facebook, but the "free" twitter is junk.

Before the change (and if I use wifi instead of 3G), the mobile twitter site worked fine. After the change, whenever I open the mobile twitter site with the phone's browser, it goes to a reduced-functionality (and uglier) version of the mobile twitter site, which loses its place often.

So the "free" twitter, at least on my carrier, redirects you to a less bandwidth-intensive (and worse) version of the site... And you have no way to prevent it (other than opening the site on wifi and being careful to not let the browser reload it while on 3G). It was better when it counted against my data cap.

Re: "Free" services

Vivo (from Telefonica) is actually trying to charge me for RECEIVING SMS from Facebook. Granted I use it only for account security but I also use Google and they never tried to charge for those and I receive a couple per day (calendar and other services).

Water companies charge for the amount of water you are using so it doesn't matter if you have a finger sized pipe or it fits a truck in there. The prices are reasonable to the average consumption of any household.

I actually don't oppose to such method being applied in internet connections as long as the speeds are offered as pipes: you pay an initial premium for the "infra-structure" and then only the data (water) is charged for. Considering an average household uses around 300-400 Gb (I'm assuming that would be a good average for Netflix, Youtube and some downloading with the upstream included) then those 300-400 Gb should fall within the average price charged for the connections nowadays. So if you want to use 800Gb go ahead but you'll pay double. Except we know it's not what happens.

You get charged for the size of the pipe and then they discriminate what goes inside it to force you pay more for their own services or pay for the privilege of using a lot of a determined "type" of water. And make no mistake, if they could they'd be charging you for the way you deliver the data to your gadgets. Wired? X cost. Wireless? Y cost. 1 machine? Z cost. 3 machines? W cost. And so on.

A while back my ISP tried to charge me extra because they detected I was using an ethernet hub to distribute the connection and told me I'd have to set up one connection per machine (this was before wireless became the norm). I bought a second ethernet board and distributed the connection from my computer. They later introduced data caps. Today they don't enforce the caps or try to charge for insanities not because there are neutrality laws but because there is plenty of competition here so if they do it wrong I can simply choose from the other 4 or 5 providers and move on.

We have something similar in Australia, and it works without too many problems - we have a range of data caps (there may be unlimited but I just don't use that much), but most ISPs offer some popular websites and software free if you download from them. They have all main debian and ubuntu repos on there, plus getting ABC (G'ment broadcaster) is also free.

As I understand it, for stuff they host, the determining factor is what people want (if you ask, they will consider it). For other stuff it needs to have a static IP.

and as usual, the consumer gets kicked in the bollocks because of what some stupid, internet idiot, bought jude(s) does in the USA, everyone jumps on the band wagon. Canadian citizens have even worse mobile phone and internet services than the USA, believe it or not. this is really gonna help, i dont think!!

I, for one, am very happy with my no-data-caps Canadian ISP

Bell/Aliant is almost, but not quite, Bell Canada. When I moved here, some fifteen years ago, it was "NBTel", which became 'Aliant' a few years later when the four provinces' phone companies merged as one.

I found their customer service and technical support excellent, well-informed, and friendly. It was a refreshing change from the years I had spend dealing with Bell Canada when I lived in Montreal. (I mean, fer chrissakes, Bell!, you only sell TWO products: phone service and phones. Would it kill you to actually know something about those products?)

One of my basic strategies in life is that you must punish bad behaviour, and more importantly, you must reward good behaviour.

In the case of Internet service, I do this by not only looking at the price, when deciding who will supply me. I consider my ISP's worthiness based on data-transfer rates, reliability, how 'vanilla' my service is, tech support, and the company's general policies, especially with regards to privacy and freedom for me.

I had an Bell/Aliant fiber optic connection installed here about five years ago - still do. At the time, I had ordered the lowest data-transfer rate available - 15Mbs each way. Since then, my data transfer rate has been automatically increased to 50down/30up, so as to keep pace with what they offer, without changing my monthly charges.

Just before the fiber optic connection was installed, I had an illuminating broad-ranging phone conversation with a customer support supervisor at Aliant (then, just about to become 'Bell/Aliant'). I asked her whether I could expect the stellar Aliant customer service to continue or whether Aliant would adopt Bell's rather poor/un-informed service standars. She replied: "You know, we had the exact same conversation in the office amongst ourselve, yesterday." I can report that their tech support is still outstanding. They understand that they are part of the community. What a novel concept!

At another conversation, a few months later, with a customer-support supervisor, I explained that I was trying to parse out their data caps' rules, with vague sentences gleaned from their web pages. After a few minutes, she flat-out told me: "We don't have data caps! In fact, our equipment doesn't monitor usage. This was our old policy when we were was just 'Aliant'. This was written in into the merger agreement when Bell Canada bought us out. Go ahead and stream Netflix 24 hours a day. We don't care. Actually, we've discovered that 'no caps' is the best advertising we've ever had."

I do get a 'vanilla' Internet connection: I can set up any Internet-facing server I want. Aliant only blocks some three ports or so (for users' security). I can set up a mail server, a web server, FTP, whatever - even a newsfeed. And I don't have to ask permission. Included in the monthly rate, I have access to a full newsfeed.

Bell/Aliant, originally a phone company, carries the 'vestiges' of being a common-carrier. Its natural reflex is to be concerned about customers' privacy.

Sponsored data is a way to skirt around net neutrality, through artificially high prices due to low "data cap" limits. All because the FCC didn't have the balls to label ISP's "Common Carriers", when everyone knows that's exactly what they are.

In this modern age, Internet Service is a utility. Just like electricity, telephone, postal mail service.

You can read all about how the FCC screwed up, hurting the American public, in this TheVerge article. Here's a snip-it...

"In 2002, the FCC made what would turn out to be a pivotal mistake. Instead of stating the blindingly obvious — internet service is a utility just like landline phone service — the FCC tried to appease the out-of-control corporate egos of behemoths like Verizon and Comcast by pretending internet providers were special and classifying them as "information service providers" and not "telecommunications carriers." The wrong words. Then, once everyone was wearing the nametag they wanted, the FCC tried to impose common carrier-style telecommunications regulations on them anyway.

I get it but I don't...

Option #1 (Bell Canada):I pay (for example) $50 for 3GB of data per month. Fine. I can watch Netflix on my mobile if I want, and if I exceed my cap, that's ok.

Option #2:I can pay the same $50 for the same cap, with the same speed, same capabilities to watch Netflix, etc. I also have the option to pay another $5 for an extra "limitless" data above my 3GB to watch streaming TV.

I'm having trouble seeing as how I've been violated in either scenario. The choice is mine (choice is good, no?) and I'm not penalized for not paying for the TV option.

Can someone explain? (Not being facetious - I am a Bell Canada (business) mobile subscriber, and have never exceeded my 6GB mobile cap. I have no interest in streaming TV to my cell phone.)

Re: I get it but I don't...

For-profit infrastructure

Internet has become a utility, one of the several situations where we have natural monopolies due to the high infrastructure requirements. Having for-profit utilities is about as advisable as for-profit fire service - that is - not very. Like it or not the best and most efficient to the customer hydro, water, sewer, and gas utilities are public owned. As Internet changes from being a luxury to an effective necessity for our quality of life, it also becomes a utility subject to the same logic - this is going to be more fairly and effectively and cheaply delivered by a public owned system with no purpose in life beyond ensuring its customers have internet. The profit motive has no legitimate place within natural monopolies.

Correction

What you didn't post, was that that offer from Bell for mobile TV for $5/month is against our ITMP rules the CRTC put in place in 2009.

PLUS there's currently a complaint against Bell lodged with the CRTC about this package, which is ongoing.

Large ISPs in Canada don't care about/follow the rules the CRTC has in place because a lot of the time it'll make them more money, and they hope they can get away with it. The public however can make a complaint, and the CRTC can smack them for not following rules. Which is what's happening now with the complaint.

can't wait for some cash-strapped local gov't refusing to stay in the 21st century because of caps and overages. and small businesses going back to the old system. and the number of people online goes down.

for me - i am happy with this system. i only use the internet to to go one place - and that is to pay my expensive landline bill online.

i honestly think that this would cause me to go back to 56k. i truely don't want to worry about how much data i am using per month. i can't control how inefficient the other side makes the webpages, if compression is turned on, if they are properly utilizing AJAX requests, etc. I don't want to be penalized for my neighbor downloading a virus and constantly pinging my IP, causing my data usage to spike. I don't want to turn off my internet at night before i go to bed. I don't want to worry about spam - i do want that gone, but i don't ask for it, yet they send it - and that counts against my caps.

and all of these problems are gone with a 56k modem. a little slower, but way way cheaper.

Re:

Funny you should say that, I've been thinking about 56king it myself. I've had no problem finding free service providers, and a lot of the high bandwidth services on the internet really don't seem like they have much of a future anymore.

I've found myself using services like the TellMe voice portal to replace some of my idle internet browsing. What's old is new again, I guess. Save me a spot on that modem pool :) .